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NEW YORK/LONDON (Reuters) - Gold prices rose moderately on Monday, firming initially on technical buying and later hitting three-day highs as the metal followed gains in oil and equity markets after data showed improved manufacturing in the United States and China.

Gold also drew support as the euro retraced early losses after falling to one-month lows against the dollar on weak European economic data. <USD/>

Spot gold traded up 0.6 percent at $1,677.46 an ounce by 3:35 p.m. EDT (7.35 p.m. GMT), while U.S. gold futures for June delivery gained $7.20 an ounce at $1,679.10.

"The U.S. stock market turned around to be supportive, plus the rally in crude oil. But gold was the first out of the box, predominantly on technical buying," said Frank McGhee, precious metals trader at Integrated Brokerage Services Llc in Chicago.

U.S. stocks extended gains in late-afternoon trading, with the Nasdaq Composite up 1 percent and the S&P 500 at a fresh four-year high as encouraging data from the United States and elsewhere eased concerns about the pace of economic growth. .N

U.S. crude futures rose more than 2 percent as the upbeat U.S. data and delays for North Sea oil cargoes countered disappointing figures from Europe. <O/R>

Manufacturing strengthened in the United States and China in March, while that in the euro zone contracted for the eighth straight month.

Analysts, however, said gold's initial moves came from a wave of technical buying when prices of the yellow metal pushed above their 20-day moving average. Gold eventually hit a three-day high at $1,683.30 per ounce.

Gold prices rose 6.6 percent in the first quarter, after Federal Reserve comments reassured investors that U.S. interest rates would remain low for an extended period, keeping the opportunity cost of holding gold low.

Signs of improvement in the U.S. economy have clouded the picture for gold, as a healthier recovery could make it less likely that the Fed will embark on a stimulus program with further government bond buying, or quantitative easing.

"The wider macro environment is generally improving ... so I think that's creating some headwinds. Also, the European banking crisis settled down, so there's less need for the safe haven of gold at this point," Standard Chartered analyst Daniel Smith said.

"But we think that the downside is actually quite limited from here," he added. "We think that actually gold will tend to rally in the months ahead on the back of a wider improvement in liquidity which we're seeing across the macrospace."

MONEY MANAGERS LIFT BULLISH BETS

Money managers, including hedge funds and other large speculators, raised their bullish bets in gold for the first time in four weeks last week, figures from the U.S. Commodity Futures Trading Commission showed on Friday.

Speculators in silver cut bullish exposure, reducing net length by 3,284 lots to 17,031 contracts -- the lowest level since the week of January 29, when they were long on 16,034 lots.

Jewelers in major gold consumer India remained on strike on Monday for a 17th day after the finance minister proposed to double the import duty on gold, an excise duty on unbranded jewelry and a tax on transactions worth more than 200,000 rupees ($3,940).

"A recent pull-back in Indian gold demand has forced prices lower over recent weeks, following the Indian government's decision to double the duty payable on gold imports to 4 percent and to impose an additional 0.3 percent tax on most gold jewelry," National Australia Bank said in a note.

Spot silver jumped 2.5 percent to $33.01 an ounce. The grey metal broke a three-quarter losing streak in the first three months of 2012, rising 16 percent on gold's coat-tails.

Spot platinum was off 0.27 percent at $1,644.73 an ounce, while spot palladium rose 0.6 percent to $652.10 an ounce.

U.S. auto sales are expected to have fared strongly in March, capping the best quarter in four years for new vehicle purchases as the overall U.S. economy improved and new car buyers found easier financing.

Automakers are the biggest consumers of platinum and palladium, widely used in autocatalysts.